A person declared they were "having a panic attack" and stormed out of a fierce Mardi Gras annual general meeting, which ended with several divisive motions being defeated.

Key points

Left-wing group argued the Liberal Party has fought against gay rights and shouldn't march

That motion, and one also banning NSW Police, was defeated at the Mardi Gras AGM

A motion to give members of the 78ers Mardi Gras life membership passed

The motions, which would have seen the Liberal Party and NSW Police banned from marching in the annual parade, had been proposed by left-wing group Pride in Protest.

Tensions rose when the future direction of the Mardi Gras was discussed, with jeering, applause and tears leaving a mark on the three-hour meeting.

The person who walked out of the meeting had been moving a procedural motion, asking for members to have respect and not talk over others during the debate.

As the tone of debate took a turn for the worse, they revealed they were having a panic attack, grabbed their water bottle and left.

The Pride in Protest motions also included barring Prime Minister Scott Morrison from marching in the parade and "reviewing" corporate sponsorships with companies like ANZ and Qantas.

Holly Brooke — who is standing as a Pride in Protest candidate for the board — argued that a review of the UK's Pride festival sponsorship had sparked change in some companies.

She said Virgin Atlantic had this year announced it would no longer provide seats on its flights to involuntarily deport people from the UK, after it was pointed out the policy was at odds with its sponsorship of London's Pride festival.

The Pride in Protest motions were comfortably defeated, but the fact they were even tabled, has caused concern within the event's ranks.

Ahead of the meeting, dozens of parade royalty signed and circulated a letter to members warning if the Pride in Protest ideas were successful, the event could go bankrupt.

Mardi Gras chief executive Terese Casu described last year's parade as the "most successful" and claimed it had injected an estimated $60 million into the NSW economy.

"Many people know that if we hadn't redefined Mardi Gras it would have died a long time ago," she told the AGM.

Despite the polarised views at the meeting, Mardi Gras co-chair Kate Wickett maintained that the event was unified.

Chair Michael Woodhouse reminded the full lecture theatre at the University of Sydney that any successful motions would still need to be approved by the Mardi Gras board.

While most motions failed, two that did pass included giving all original Mardi Gras marchers, known as the 78ers, life membership of the event, and that Sydney should bid to host the World Pride festival in 2023.